Correlation Between International Business and Hackett
Can any of the company-specific risk be diversified away by investing in both International Business and Hackett at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining International Business and Hackett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and The Hackett Group, you can compare the effects of market volatilities on International Business and Hackett and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in International Business with a short position of Hackett. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Hackett.
Diversification Opportunities for International Business and Hackett
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Hackett is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and The Hackett Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hackett Group and International Business is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on International Business Machines are associated (or correlated) with Hackett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hackett Group has no effect on the direction of International Business i.e., International Business and Hackett go up and down completely randomly.
Pair Corralation between International Business and Hackett
Considering the 90-day investment horizon International Business is expected to generate 1.33 times less return on investment than Hackett. But when comparing it to its historical volatility, International Business Machines is 1.88 times less risky than Hackett. It trades about 0.16 of its potential returns per unit of risk. The Hackett Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,629 in The Hackett Group on August 28, 2024 and sell it today you would earn a total of 491.00 from holding The Hackett Group or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. The Hackett Group
Performance |
| Timeline |
| International Business |
| Hackett Group |
International Business and Hackett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Hackett
The main advantage of trading using opposite International Business and Hackett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Hackett can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hackett will offset losses from the drop in Hackett's long position.| International Business vs. Data Storage Corp | International Business vs. Usio Inc | International Business vs. ARB IOT Group | International Business vs. FiscalNote Holdings |
| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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